2020 Semi-Annual WDC Metro Salary Report – Insurance Compensation Levels Decreasing!
2 min read
Updated: Dec 13, 2021
Life is strange. As we were busily crunching the compensation numbers from the first half of 2020 for our 17th Semi-Annual WDC Metro Salary Report, we were still receiving emails and comments regarding to the 2019 Salary Report – people on both sides of the fence reacted very strongly. And now to discover that compensation levels are now decreasing?
Yes, 2020 is a new year. And I have some bad news: for the first time since 2009 we have found that the average compensation for insurance professionals in the WDC region has decreased slightly year over year. Given the historical demand for top talent in the WDC region, I never thought I would see the day when this would occur. I am very surprised.
So the question is What Happened? Two words: COVID-19 AND continued CONSOLIDATION via mergers & acquisitions. Permit me to explain:
COVID-19: One of the unintended consequences of COVID-19 is that firms of all shapes and sizes have embraced the Home Work Environment (HWE) business model. This has energized HR departments to identify highly qualified candidates who live far outside the beltway and commuting range. WDC and Beltway insurance firms are now promoting their HWE capabilities to attract this previously forgotten talent pool. Secondarily, this remote talent pool is between 33%-50% more affordable compared to their contemporaries living inside the beltway and in WDC. It’s an effective way for firms to cut their salary expenses. Hence, these reduced compensation levels are starting to show up in the analysis.
ACQUISITIONS: I will not mention any specific names because several of these firms are my clients, but it is obvious to all those in the WDC insurance market that there are a significant number of mergers and acquisitions now taking place with MUCH more on the way. One such large WDC insurance broker is rumored to be getting ready to reduce their salaries by up to 20% by the end of 2020. The exodus of top talent from this firm is also resulting in downward pressure on compensation.
Where do we go from here? Based on my discussions with candidates and clients in the WDC metro area I anticipate most firms being re-opened by end of July at the latest. This re-opening will re-energize business in general and create more demand in the marketplace. Many of my clients have been in the passive candidate review process withholding plans to pull the trigger until offices re-open. Now that more offices are opening more hiring will occur and things will return to normal by end of the third quarter.
THE IMPACT: Regarding the impact of remote workers from cheaper markets continuing to depress compensation levels, I see this as a short-term anomaly only because the talent pool in these smaller, rural areas is very limited. Thanks to the efforts of my recruiting staff, most of this top talent has already been swooped up by my smart clients who recognized this opportunity and acted decisively. The pickins’ are very slim now.
Of course, all this depends on what happens with COVID-19 and if it decides to rear its ugly head again.
Stay safe out there!
